(Miss this week’s Leadership Brief? This interview below was delivered to the inbox of Leadership Brief subscribers on Sunday morning, Jan. 31; to receive weekly emails of conversations with the world’s top CEOs and business decisionmakers, click here.)
While President Joe Biden’s Cabinet and other senior-level appointments have generally received high marks for their overall competence and experience, there is one notable empty seat at the table. At a moment when the health of the nation, and the nation’s economy, is dependent on production and distribution issues, one can’t help but wish there were at least one private-sector business ninja in the Cabinet, ideally a person with manufacturing, logistics and supply-chain experience. Social media is atwitter with facetious calls for Amazon Prime to deliver the COVID-19 vaccine and take care of the problem in two days. My own half-facetious daydream is to put Walmart—which has 150 million people passing through its doors each week and operates more than 5,000 pharmacies, many in underserved areas—in charge of vaccine distribution. If you talk to business leaders, there is a palpable sense of “Put me in, Coach!”
One potent frontline presence is Albertsons, the nation’s third largest food retailer, with more than $63 billion in sales and operations in 34 states. Albertsons also employs 11,000 pharmacists and pharmacy technicians and is gearing up to hire hundreds more to help the vaccine effort. “At this point, though, our bottleneck is not qualified technical people to do it,” says Vivek Sankaran, the chief executive of Albertsons. “It’s the vaccine itself.”
Sankaran believes the vaccine’s shaky rollout is contributing to the nation’s anxious mood. “The stress level is up again,” he says. “There’s a realization that this may be a little longer than we all imagined.”
On Jan. 21, Sankaran joined TIME for a video conversation about vaccination logistics, the products that keep selling during the pandemic (lobster, tequila and ice cream), and the growing impatience of U.S. consumers.
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(This interview with Albertsons CEO Vivek Sankaran has been condensed and edited for clarity.)
You are in the vaccine business now. How’s it going?
We’ve always been in the vaccine business. The crazy thing is, we’ve been planning for this for months now. We can do this in parking lots and offices. And so we stand ready; we have 11,000 people who can do it. We don’t have vaccines! So we’re trying to work through the federal and state authorities. But I just think it’s regrettable. It’s gummed up somewhere. And hopefully, we’ll get that distribution really quickly so we can get it. Once we have it, we’re all ready to dispense it. We’ve been allocated 200,000 vaccines, and I think we received 105,000. We’ve already immunized 90,000 people. [UPDATE: As of Jan. 26, Albertsons had administered over 200,000 doses.]
When did you do your first vaccinations?
Two or three weeks ago [in late December]. We started in Alaska.
How has it been working, getting shipments?
It’s a bit sporadic. So, for example, we get 20,000 suddenly in one locale. Then we get another 15,000 somewhere else.
The new Administration is taking a much more active role in vaccine distribution. What has been lacking?
What has been missing is a coordinated federal and state approach to managing distribution. We need to have one set of standards on who gets what when. But right now, we need to focus on speed, focus on scale. We should have established one set of standards, and get the vaccine out to distributorship points. Then the local teams will find creative ways to get people vaccinated. We can do it in our pharmacies. We could open up our parking lots. We vaccinate today in parking lots. You can get a flu shot in a parking lot.
Have you been vaccinated yet?
Nope. I will when my turn comes and I qualify.
Have you been suddenly hearing from people in your life now that Albertsons has the vaccine? Are people emailing you, “Hey, how are you?”
Surprisingly, people have been very good about it. I don’t get those emails trying to get in line.
Switching gears, how has the pandemic affected how people shop and eat, and how much of that changed consumer behavior will persist beyond the end of the pandemic?
It’s a big shift to eating at home, and there’s a lot more cooking at home. Some of that is going to stick because we’re all going to find ways to work more from home. I haven’t met a CEO yet who hasn’t said they’re rethinking the configuration of the office and the balance between working in an office and working at home and providing that flexibility. And if you work two days more at home, or one more day at home, that’s another breakfast and lunch at home. That’s massive numbers.
We don’t have vaccines!”</span><span style="font-weight: 400;">
What are people buying? Are we coming out of this fit or fat?
People are doing both. They’re eating healthy. We’re selling a lot more organic produce. But they’re also indulging. We’re selling more wine and tequila than we ever have. And we’re selling more ice cream and salty snacks than we ever have.
I noticed you have a store-brand Tennessee whiskey that’s very highly rated in taste tests.
Yes, that’s correct. We just launched our own champagne. We have a vodka. Those do well. Actually they’re terribly good.
In terms of fresh products, what’s selling?
Oranges. All fruit sales. Especially oranges. I think there is an orientation toward vitamin C. We’re also seeing an incredible spike in seafood.
Tuna, salmon?
A lot of shrimp. A lot of shellfish, lobsters, crab legs. We’re finding that we sell a lot of what I think of as opposites. They’re buying value in chicken. And at the same time also buying grass-fed beef and lobsters. They’re celebrating through food because what else do we do?
What about breakfast?
People are having a good breakfast. We’re selling more eggs, more pancake mix. Bacon, sausage, bread. We’re selling much more than we did. Breakfast has become an anchor meal in the morning before you jump on your series of Zoom calls.
We’re selling more wine and tequila than we ever have.</span><span style="font-weight: 400;">
Any product shortages persisting?
It’s not as dramatic as it was. But it’s the same thing: cleaning supplies, disinfectants and such. We have outages in things that are related to cooking. We have outages in baking flour and certain spices.
We still see some outages now in the things that are packaged in aluminum cans because there’s a shortage there—some beers and soft drinks and some challenges there.
I wasn’t aware of that. There’s an aluminum-can shortage right now?
Here’s what’s happened. You have a shift from consumption in restaurants to consumption at home. Let’s say you have a carbonated drink in the restaurant. It doesn’t show up in a can. It shows up in a box, in a concentrate, and you get it from a dispenser. All of the volume has been shifting to the home, and when you drink it at home, you’re drinking it in plastic bottles and cans. There’s some spike in that demand. That’s what’s creating it.
And do you happen to know what particular spices are out of stock?
You can get the basic ones. But if you go a little deeper for cooking meat, you’ll find that’s something short.
That’s why I can’t find cumin.
Indeed.
Let’s talk about the competition. Give me a two-word characterization of your biggest competitors?
Is this more for fun for you, Eben?
Yes, it is. Ready? Walmart?
Big, strong.
Costco?
Smart merchandiser.
Amazon?
Changes expectations.
How so?
More and more consumers are going to expect that from the moment I order it, I want it within two hours.
In March, when supermarket employees were declared essential workers, you added 30,000 workers, in part by teaming up with companies in the hospitality industry that had laid off or furloughed workers. Why is that hospitality experience so valuable in a grocery store?
The human touch matters so much. We get so enamored with technology today. Being able to do that little extra in a very difficult period for customers, a very stressful time, that’s what hospitality does. I love technology, but we put too much technology into everything we do. The letters I get from customers are because of an exciting or disappointing interaction with a human.
So this is a serious question, but you’ve gone from being a supplier, at PepsiCo, where you had a series of big jobs including running Frito-Lay, to being a customer. Have you used that against your former employer? Have you been able to leverage your knowledge coming from the other side, and to your advantage?
I know all the tricks. All kidding aside, I know that a good CPG [consumer packaged goods] company wants growth. They care about the customer just as much as I do. And so when we can find a way to get mutual growth, magic happens. The pie gets bigger and everybody is happy.
Did you have a favorite product at Frito-Lay that was introduced under your watch?
Doritos Flamin’ Hot.
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